On buying a boat

Some words of wisdom.

He who has the money controls the deal----basic business. The Broker/Seller will do their best to convince you otherwise but remember, he doesn’t get a cent until the boat is sold. Rule 1-( will refer to it often) he who has the money has the power. When I use the term Broker I mean the Broker or the Seller.

Here's another, said before but with an important point; the sale should be conditional on the hull and mechanical surveys. Many preprinted contracts say something like, "sale conditional on mechanical and hull survey showing no reasonable defects".. Get that "reasonable" out of the offer/sale. YOU and only you should determine what is a defect.

Be a knowledgeable buyer……When I bought my 1993 3288, I looked at the asking price and told the broker what I was will to pay. I had gone to several broker sites including Yacht World, gathered asking prices of similar boats, got selling prices when I could and spread sheeted everything running averages, means and standard deviations. I knew what the boat was worth on the open market.

Don’t be afraid to low ball especially if the boat has been on the market for awhile. If the broker is insulted, he’ll get over it. This is a who cares statement..I’m not asking the guy to dinner! The come back will give you an idea of what the seller really wants.

Do not show emotions over the boat (I love this and just gotta have it). Brokers are salespeople and they can smell blood on the water. They will advise their client to hold out for more money if they think they can get it. Sometimes playing good guy, bad guy with you wife works too. She likes it, I could care less!

Never get chummy with a broker…you don’t need to cut his head off…just keep it profession. He ain’t your best friend!

Take what the brokers say as a grain of salt! Man, the stuff I’ve heard! I had water dripping on my head through a centre deck cleat and the broker’s statement was, “oh, a little sealant will fix that”……yea right after you replace 5 square feet of deck core. The only person on your side is the Marine Surveyor you hire to go over the boat. Hire a good one, check references, make sure he’s good and oh, B.T.W. the broker’s reference is the worst one!

Remember, even if you approach a broker to buy a boat he still is not in your corner. He makes his money when you hand over yours. Back to Rule 1!

Before handing over a cent, get as much information as you can on the broker’s financial position. If it isn’t good….walk away to another broker.

When you decide to make an offer negotiate the down payment to a minimum amount. Two dollars forms a legal contract to buy, anything else is icing on the cake. The Broker (or seller) will ask for the moon…..offer a piece of cheese (rule 1). Forget about any reverse logic “like this is an expense item”, “I can’t take an offer like that to my client”….if he won’t another broker will. When I bought my boat the broker asked for a 20% down payment in the form of a certified cheque. After some discussion, he got $7000.00 in the form of a cheque and two dollars cash to seal the deal. Hell he had a week to determine if the money was really there. I’d already checked his credit rating, he could check mine as quickly.

The offer should be in the form of a contract … READ IT. Do some basic research on what is legal and not legal in your area of dealing. I have seen many of these contracts with stuff in that doesn’t even meet the legal requirements of the jurisdiction they are written in or exceed the authority of the contract. Cross out the stuff that you don’t like and initial it. Have the broker initial the change as well. Add in anything that is not in the contract (accessories that you want included, conditions like a sea trial) and include what happens if the conditions are not met (full refund and no deal) whatever.

Remember – if it ain’t in writing it doesn’t exist…..no such thing as an agreement with too many conditions.

DEAL BREAKERS

….Survey not perfect (or things found that were not included before the offer)…if they are small you can either negotiate for money, repairs or drop the condition..but it should be legally your option.

…Boat is not owned free and clear (your surveyor can help you find out this information). Sorry, I guess this needed more explanation. If there is a loan on the boat and it is declared at time of sale it isn’t a deal breaker, but you will have to ensure the loan is cleared at time of purchase (and deal with it in the offer language). This could take a few forms. You could cut two checks, one to the owner/broker and one to the owner/ financial institution or assume the loan in your name or have a statement of clear ownership issued by the owner and holder of the lien as a pre-condition of sale. If you find undeclared liens on the boat my advice is to step away! If you find one, there could be more and they could be in a number of forms.

Do not, under any conditions hand over final payment until all conditions of the deal are met and the keys are basically in your hand.

Favourite Broker-isms

Are you really serious? Reply--No I just drove 100 miles and wasted a day to meet you

This offer insults the owner. Reply---is the boat for sale or not?

A larger down payment would show your serious…..Reply…gee I thought that was what the contract offer was for.

This offer is way too low!.....Reply …thank God….I was afraid I was high!

More wisdom

I think the thing to worry about most, especially with a boat, is a mechanics lien. Any shop that does does work can levy one and they are not easy to trace. I used to run a finance company years ago and along with giving the money out I always had to get it back. I can't count the number of repos that we had that appeared to have clear title on a car at the time we assumed them, but after the redemption period (the time the customer has to make good on the defaulted loan before a lien holder can sell it) a mechanics lien had shown up in the system. So not only did we need to recover OUR money, but we had to pay off the mechanics lien to be able to auction the car off.

This is especially important in boats, since I think people may have work done over the winter, things change, they can't afford the boat, let alone the repairs, so they try to sell it, and there is a 2 or 3 thousand dollar repair bill outstanding. if the shop is SMART they will have tossed a lien on the boat to over themselves, and in that time period it may not show up in the doc trail yet

Take Pictures

I think someone else already said this..take pictures....lots of pictures..inside..cabin..bunks....engine room...outside...everywhere. Good to refresh your memory on delivery and for insurance purposes. Make sure everything is included and delivered.

Marine title company

The very best thing you can do to protect your interests is to hire a marine title company to complete the paperwork.

The process is simple. Negotiate your deal. Sign a contract to purchase Take or send the contract to a marine title company, along with the "Earnest Money" check, made out to the title company. The cost of this service is a couple hundred dollars. The peace of mind is priceless.